Post navigation

Berlin To Borrow Funds To Pay For Sewer Plant Project

BERLIN – The town of Berlin will seek interim financing for the wastewater treatment plant work through bonds and grant anticipation notes that will carry the project financially until completion.

“We’ve got to do interim financing to get there,” said Berlin Mayor Gee Williams of the $6 million in general obligation bonds and $8 million plus in grant anticipation notes the town plans to issue.

“We’ve got to borrow this money in anticipation of receiving the grants,” said Berlin town attorney Dave Gaskill.

Two weeks ago, the town announced a federal and state funding package including American Recovery and Reinvestment (ARRA) money to fuel the major improvements to and expansion of the wastewater treatment plant and treated effluent lagoon liner.

The project will cost $16 million. The ARRA monies will come from a United States Department of Agriculture (USDA) loan for $5,988,000; a USDA grant of $5,828,217; a Community Development Block Grant of $700,000; and a Maryland Department of the Environment grant for $1.5 million. Berlin must pay $1,997,000 outright.

Monday night’s Berlin Mayor and Council meeting saw the first reading of ordinances allowing bonds and grant anticipation notes to be issued. The public hearings for both ordinances will be held Oct. 13.

“Sewer and water fees will be the primary source of paying them off,” said Williams.

In the worse case scenario, said Councilwoman Paula Lynch, the town would have to pay that bond debt with tax revenue.

That is only if Berlin does not grow over the next several years, Williams said. Growth means adding more sewer and water hook up fees, which would be used to pay down the debt.

The Oct. 13 council meeting will also feature a discussion of the wastewater treatment plant project numbers by the Berlin Utilities Commission and consultants URS engineering. That’s when the town will get down to the nitty gritty and learn how the finances will work, said Lynch.

The town must create a realistic rate schedule for wastewater customers that generates enough income to pay the new debt, Williams said. Under U.S. Department of Agriculture loan rules, the town is required to adopt sewer rates that allow the town to pay the money back.